Scallion Ltd. Accounting Transactions June 2023 a) Special Journals:

1. Sales Journal:

Date Invoice No. Customer Account Credited Amount (GST incl.) June 13 210 M. Biller Accounts Receivable $9,020 June 16 211 O. Mowen Accounts Receivable $5,170 June 29 212 J. Rowls Accounts Receivable $15,400 June 30 213 O. Mowen Accounts Receivable $17,600 2. Purchases Journal:

Date Invoice No. Supplier Account Debited Amount (GST incl.) June 5 - Tumult Ltd Accounts Payable $4,400

Explanation:

Scallion Ltd. Accounting Transactions June 2023 a) Special Journals:

1. Sales Journal:

Date Invoice No. Customer Account Credited Amount (GST incl.) June 13 210 M. Biller Accounts Receivable $9,020 June 16 211 O. Mowen Accounts Receivable $5,170 June 29 212 J. Rowls Accounts Receivable $15,400 June 30 213 O. Mowen Accounts Receivable $17,600 2. Purchases Journal:

Date Invoice No. Supplier Account Debited Amount (GST incl.) June 5 - Tumult Ltd Accounts Payable $4,400 June 20 - Lynwood Ltd Accounts Payable $5,390 June 26 - Dyson Ltd Accounts Payable $35,750 June 30 - Amcor Ltd Accounts Payable $26,400 3. Cash Receipts Journal:

Date Description Account Credited Amount (GST incl.) June 2 M. Biller (partial payment) Accounts Receivable $10,000 June 7 Tumult Ltd (May invoice) Accounts Payable $ June 15 O. Mowen (full payment) Accounts Receivable $7,920 June 15 Tumult Ltd (June 6 invoice) Accounts Payable $4,400 June 17 M. Biller (May invoice balance) Accounts Receivable $4,850 June 23 M. Biller (invoice 210) Accounts Receivable $9,020 June 26 O. Mowen (invoice 211) Accounts Receivable $5,170 June 30 J. Rowls (invoice 212) Accounts Receivable $15,400 June 30 Cash Sales (to June 15) Sales $3,740 June 30 Cash Sales (June 16-30) Sales $2,145 4. Cash Payments Journal:

Date Cheque No. Description Account Debited Amount (GST incl.) June 1 98 Land & Retail Store Land $77,000 June 1 98 Land & Retail Store Mortgage Payable $33,000 June 2 99 Lynwood Ltd (partial payment) Accounts Payable $14,700 June 5 100 Fire Insurance Prepaid General Insurance $792 June 6 101 Tumult Ltd (May invoice) Accounts Payable $ June 8 102 Inventory Inventory $5,500 June 8 103 Lynwood Ltd (full payment) Accounts Payable $15,000 June 15 104 Tumult Ltd (June 6 invoice) Accounts Payable $4,400 June 16 105 Salaries Salaries Expense $2,650 June 20 106 Dyson Ltd (full payment) Accounts Payable $21,780 June 22 M. Parson (office expenses) Office Expenses $143 June 26 107 Electricity Expense Electricity Expense $220 June 26 108 Lynwood Ltd (June 20 invoice) Accounts Payable $5,390 June 29 109

Prepare any adjusting or correcting entries required as at 30 June 2023 in relation to the additional information provided above.

2. Any entries necessary in respect of depreciation for each class of non-current assets discussed in the information given for the year ended 30 June 2023

3. Scallion Ltd uses the allowance method of accounting for bad debts. One percent of net credit sales is estimated to be uncollectable for the year ended 30 June 2023(round amount upward to nearest whole $). On 30 June, Scallion Ltd was notified by the lawyers of Croft Ltd that they had been declared bankrupt and were unable to pay the amount owing. This debt was subsequently written off.

4. Scallion Ltd received the June 2023 bank statement from First State Bank, as shown below:

Scallion Ltd

STATEMENT OF ACCOUNT-FIRST STATE BANK

DateParticularsDebitCreditBalance

$$$

1 JunBalance brought forward71,135 CR

2 JunDeposit2,00073,135 CR

2 JunCheque 9655072,585 CR

4 JunCheque 9833,00039,585 CR

5 JunDeposit60,00099,585 CR

6 JunCheque 9914,10685,479 CR

7 Jun EFT-Collection of Rent 2,000 87,479 CR

8 JunCheque 100 79286,687 CR

8 JunDeposit10,00096,687 CR

9 JunInterest on account500 97,187 CR

9 JunCheque 101 17,82079,367 CR

17 JunCheque 1043,449.6075,917.40 CR

17 JunBank Charges11075,807.40 CR

17 JunCheque 10315,00060,807.40CR

17 JunDeposit11,66072,467.40CR

18 JunDeposit4,85077,317.40CR

19 JunCheque 1052,65074,667.40CR

21 JunCheque 10621,78052,887.40CR

30 JunDeposit2,14555,032.40CR

30 JunCheque 11033054,702.40CR

30 JunBank Charges15054,552.40CR

The previous bank reconciliation performed at 31 May 2023 is provided below:

Bank Statement Balance 31 May 2023 $71,135CR

Plus : Outstanding Deposits 2,000

Less;

Unpresented Cheques;

96$ 550

971,8002,350

Balance per Cash at Bank Account 70,785

Additional Information:

*EFT stands for Electronic Funds Transfer. Scallion Ltd does not have any rental properties. For any differences between the records of the bank and the entity, assume the business records are correct.

a. Using the information provided, prepare the Cash at Bank account at 30 June 2023 using a "T" account (any required adjustments as a result of the bank reconciliation, should be made through the cash journals).

b. Prepare the Bank Reconciliation Statement for Scallion Ltd at30 June 2023.

5. Prepare a fully classified profit or loss statement for the year ended 30 June 2023 and a balance sheet at 30 June 2023 showing all assets, liabilities and equity items for Scallion Ltd. Also show how the sales account would appear in the general ledger at the end of the accounting period and the GST paid account (T accounts are preferred).

In the following section, you are required to provide written explanations to the following two questions. This section is to be no more than 500 words in total and your answers are required to be properly referenced. No marks will be given for these two questions if your answers are taken from online sources without proper referencing.

6.Provide an explanation for the accounting treatment of GST and accounting for bad debts that is recommended according to generally accepted accounting principles (GAAP), if:

i) You were required to write off the balance of a customer's accountii) You had to estimate bad debts expense using the allowance method for the year end accounts

7. Does Scallion Ltd account for income tax in their financial reports for the year ended 30 June 2023? If so, why?